With his long-stalled economic agenda in political peril, President Biden on Friday called on congressional Democrats to refocus their once-sweeping spending ambitions — and adopt a package soon that aims to lower Americans’ health-care costs.
The swift collapse stemmed from Manchin’s renewed fears about rising prices, seven months after similar fiscal concerns prompted the moderate West Virginian to scuttle Democrats’ roughly $2 trillion plan, known as the Build Back Better Act. Privately, Manchin told Democratic leaders this week he could not support their latest push to spend money to combat climate change or raise taxes on wealthy Americans and corporations, as The Washington Post first reported Thursday night.
Instead, Manchin essentially issued his party an ultimatum: They could accept a smaller deal this July focused on health care costs, or they could try again on a larger package once he has a chance to assess whether the economy has improved. The senator delivered that message publicly Friday, stressing on a West Virginia radio show that “inflation is wreaking havoc on everybody’s life.”
The demand immediately left Democratic lawmakers seething, as they charged that the pivotal moderate had once again thwarted Biden in what is a critical election year. Already, the party had abandoned its more audacious proposals to expand child care, education and a wide-array of poverty-fighting programs — only to face the reality that the concessions still weren’t enough to win Manchin’s must-have vote.
Biden, however, soon sought to resolve the logjam by calling on Democrats essentially to take the deal, arguing that even a smaller package would provide immense financial relief to Americans.
“Families all over the nation will sleep easier if Congress takes this action. The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it,” he said in a statement issued as he visited Saudi Arabia.
In the meantime, Biden pledged to take “strong executive action” on climate change if Congress did not, stressing that he would “not back down” on “the opportunity to create jobs and build a clean-energy future.”
Biden’s call to action reflected the impossible political bind facing his party, as lawmakers have toiled unsuccessfully for more than a year to shore up Manchin’s support. The senator grew only more reluctant to cast his vote in favor of new spending once data released this week showed the price of gasoline, groceries and other goods had surged by more than 9 percent last month compared to a year earlier.
“Can’t we wait to make sure we do nothing to add to that? And I can’t make that decision on basically taxes of any type and also on energy and climate,” Manchin said during his radio interview Friday. “But I’m not going to do something, and overreach, that causes more problems.”
Manchin’s opposition ultimately proved decisive, since Democrats require his vote to advance legislation using the process known as budget reconciliation — a tactic that allows the party to sidestep a Republican filibuster in the narrowly divided chamber. The same fate met Democrats’ last attempt to advance an economic measure, a sprawling $2 trillion effort to overhaul federal health care, climate, immigration, education and tax laws that Manchin refused to support.
“Senator Manchin has said a lot of things. Every time, what he makes clear over and over again, is he can’t close a deal and that you can’t trust what he says,” lamented Rep. Pramila Jayapal (D-Wash.), the leader of the Congressional Progressive Caucus on Friday. The left-leaning bloc tussled with Manchin for months in pursuit of a larger package. The House passed its own version of the legislation in November.
If Democrats act now, opting for haste, they can still achieve major health-care reforms. Their proposal would empower Medicare for the first time to negotiate the costs of some prescription drugs on behalf of seniors. It also would extend a federal program that provides financial assistance to millions of Americans who purchase insurance through state and federal exchanges. The initiative is set to expire this year, leaving roughly 13 million facing price hikes, unless Congress acts.
Manchin has long shared with his party a desire to lower health care costs, prompting Biden to point out in his statement Friday that Democrats “have come together” and “beaten back the pharmaceutical industry,” which has opposed their plans. Biden’s statement never once mentioned Manchin by name, a marked departure from the stinging rebuke the president’s aides issued when talks collapsed last year.
But taking a deal this month would also prevent Democrats from securing historic spending to fight climate change. Party lawmakers had hoped to seize on their rare control of the House, Senate and White House to reduce dangerous emissions and lessen the country’s dependence on fossil fuels, particularly in the event that Republicans take control of Congress this fall.
If Democrats instead choose to hold off, they might have a final chance to secure a larger deal with Manchin in the weeks ahead. But they have no guarantee that the senator would support them after more than a year of ill-fated wrangling, a seemingly endless back-and-forth that has seen Manchin seek delays or change his mind multiple times. Adding to the pressure, Democrats would have to adopt a law by Sept. 30 — or risk losing the ability to advance spending legislation using reconciliation entering the new fiscal year.
“The challenge is, do we take the short term and not get anything bigger?” asked Rep. Richard E. Neal (D-Mass.), the leader of the tax-focused House Ways and Means Committee. “Or do we hold our for the possibility of bringing Joe into the fold?”
Neal said he wanted a “bigger deal,” describing the House-passed $2 trillion bill — which included tax increases targeting wealthy Americans and corporations — as “very popular.” But he said it would ultimately fall to Democratic leaders, including Biden, to chart the way forward.
Faced with a difficult balancing act, many Democrats on Friday erupted in anger, especially those who had most fervently hoped for a sweeping deal around climate change. Some acknowledged there is no guarantee Manchin would eventually support the legislation if they waited at least a month to act.
“It’s infuriating, and nothing short of tragic, that he appears to be walking away again from taking action on climate and energy,” said Sen. Tina Smith (D-Minn.), a staunch advocate for investments to combat climate change, acknowledging that Manchin’s comments were “slightly different this morning.”
“My preference continues to be to pass the best piece of legislation we can that has 50 votes,” she said. “I don’t feel a high degree of confidence right now the 50 votes we need are going to be any different in August [or September].”
In a rare rebuke, Sen. Martin Heinrich (D-N.M.) directly blasted Manchin for his stance — since Manchin is the leader of the Senate Energy and Natural Resources Committee. Noting that the country has a unique “opportunity to address the crisis,” Heinrich tweeted that he was left to question “why [Manchin is] chair” of the panel.
And Sen. Edward J. Markey (D-Mass.), a longtime advocate for aggressive action on climate change, faulted Manchin for his approach. Markey said that all signs are reporting to an inflation report next month that is lower, as gas prices begin to fall, meaning lawmakers “could have factored that in and moved forward right now.”
In the days before the discussions collapsed, Senate Democratic Leader Charles E. Schumer (D-N.Y.) haggled privately with Manchin, as the two had done for months. At one point, party officials even offered to drop a key proposal setting a minimum tax on corporations in exchange for climate spending, according to a person familiar with the matter who requested anonymity given the sensitivity of the talks. The move was meant to address Manchin’s concerns about raising taxes as inflation soared, while paving the way for new climate spending.
But the late concessions proved insufficient, the source said, as Manchin stood his ground. On Friday, he called for an energy policy that combines investments in the “cleaner” production of fossil fuels with new federal efforts to foster “cleaner technologies.”
“As far as I’m concerned, we’ve had … good negotiations,” Manchin told West Virginia MetroNews radio. “There’s no human being who would put themselves through this if they weren’t sincere about trying to make things good for our country.”
For the moment, Schumer has not indicated the path forward in the Senate, where work remains underway to prepare critical portions of the spending package for floor consideration. Democrats are set to confront the impasse directly at their private weekly lunch on Tuesday, two other people familiar with the matter said. They are expected to try to devise a strategy in the wake of Manchin’s demands, the aide said, at a time when tensions are running high.
Schumer aides declined to comment Friday.
At the White House, meanwhile, top aides to Biden already had grown dismayed and cynical about the negotiations. Only seven months earlier, the last attempt at a grand bargain around an economic package ended in public acrimony, with Manchin and the White House trading sharp barbs over who was to blame for collapse in talks.
“This is how the White House has always feared this would end,” said one White House adviser, speaking on the condition of anonymity to reflect conversations with administration officials. “It really is a stunning turnaround from the dreams of a Green New Deal to this.”
Tyler Pager and Jeff Stein contributed to this report.